Some of the world's largest economies, such as China, still only hold a relatively small proportion of gold in their reserves. In 2024, It represented only 6% of the country's total reserves but demand from the People's Bank of China has surged in recent years. As a result, gold price movements have shown a strong correlation (above 0.77) with China's reserve accumulation. Beyond China, several emerging economies - given the current volatile geopolitical environment - may also seek to reduce their dependence on the U.S. economy by increasing their gold reserves, This trend suggests continued upward pressure on this precious metal prices, at least through the first half of 2025.

“The price of gold reaches historic levels, driven by geopolitical fragmentation, uncertainty surrounding the second term of D. Trump, and central banks' increasing demand for this metal,” said Simon Lacoume, sector analyst at Coface.

An attractive investment

The decline in investor confidence in the face of economic uncertainty, high gold valuations, and anticipated interest rate cuts reinforce the shift toward portfolio diversification in favor of gold. It has outperformed major stock indices in terms of price returns, highlighting its appeal during times of economic uncertainty. In 2024, private investment in gold accounted for 25% of global demand.

Jewelry at half-mast

Meanwhile, gold demand for jewelry has declined slightly compared to pre-COVID levels, falling 7% between 2019 and 2024. In 2024, jewelry demand accounted for 40% of total gold demand, a 4-percentage point decrease from 2019. This drop has been especially sharp in major markets such as India, Pakistan, and China, where high gold prices and slowing economic growth have dampened consumer demand.